Proponents of a living-wage ordinance snatch defeat from the jaws of victory

First-term City Councilman Leo V. Chaney Jr. proudly calls himself a fighter for "poor people's issues." And for more than a year, he's sought to prove it, toiling to hammer out a majority coalition on the City Council capable of passing a so-called "living wage" ordinance. Last week, however, an unforeseen legal sticking point apparently put the long-anticipated measure on ice.

Approved in at least 50 cities since the mid-'90s, living-wage ordinances set wages above the federal $5.15-an-hour minimum. Generally, the ambitious-sounding measures target only a limited number of jobs in municipal purview, such as positions at businesses that receive city tax breaks, economic assistance, and contracts. But activists, led nationally by the low-income advocacy group Association of Communities Organizing for Reform Now (ACORN), admit they're more interested in relatively small but symbolic measures to illustrate that minimum wages aren't necessarily "living" ones.

Led by ACORN's Dallas chapter, about 70 supporters from a broad coalition of Dallas community groups, including the AFL-CIO, NAACP, and the Green Party, jammed a January 22 meeting of a council panel headed by Chaney. Their demand: that Dallas require businesses that reap city tax breaks to pay workers wages up to $9.45 an hour, or $8.20 an hour with health insurance. "No business is 'forced' to take a handout from the city," argues Dallas AFL-CIO chief Gene Freeland.

Peter Calvin

City Councilman Leo Chaney thought he had the votes for a living-wage ordinance. He didn't.

The ordinance wouldn't apply retroactively, and a politically touchy provision applying higher wage standards to city contractors, such as janitorial and security firms, was quietly dropped beforehand. In addition, the ordinance would affect only businesses with 10 or more employees that receive at least $50,000 in city money.

Defying skepticism even from advocates certain big business would squelch their efforts, Chaney forged an eight-member majority of African-American and Hispanic council members--plus Laura Miller--to push the proposal through the 15-member council. At the meeting of the Minority and Municipal Affairs committee, the council unanimously approved the ordinance to cheers from passionate supporters. "I'm not on the fence, I am for it," said an emphatic Councilman Don Hill.

But that jubilation turned out to be short-lived. Because of an obscure proviso tucked into the city's tax abatement law not noticed until the last minute by city lawyers, it turns out that eight votes just aren't enough. While on Monday of last week Chaney was confident his measure would prevail in council on February 28, the day Mayor Ron Kirk (not a supporter) scheduled a vote, by Tuesday, victory was abruptly snatched from him. "Good God, that throws the whole thing out of kilter," he told the Dallas Observer. "I'm being killed."

Like other cities, Dallas offers millions in tax abatements to lure business. To be sure, the wage issue is moot for technology and other highly skilled, cutting-edge firms that receive city tax breaks, because they already pay high wages. But others--particularly hotels that employ batteries of low-paid, low-skilled bed changers and cooks--don't pay much above federal minimums, and the living wage would dramatically alter the way they do business. Faced with the possibility of a law, they fought behind the scenes to stop it. "I didn't realize the pressure would be so intense," Chaney says.

So what happened? The rub is that under state law, statutes that regulate the giving of tax breaks deemed private/public partnerships aren't so easily amended. A super-majority of 12 votes on the City Council is needed to tinker with tax-abatement laws.

What's left of the proposal applies the $9.45-an-hour wage to other, smaller development incentives, including grants and loans. So Chaney says he and other living-wage backers are at a crossroads: Try to pass the measure as is and possibly lose, or chuck its most crucial provision and vote into law the remainder. He favors the latter. "I'm a very practical person, and I want this to pass," he says.

The bill's sudden stumbling contrasts with the buoyant mood of the committee hearing two weeks ago in City Hall, where a platoon of advocates gathered to make its case.

Linda Daniels, a Pleasant Grove resident and ACORN member, offered up a colorful pie chart. "There are already too many jobs that pay poverty wages," she said. "We don't need to subsidize more of them with our tax dollars." Daniel's graphic itemized basic family living costs--food, rent, utilities, clothes, transportation--that vastly exceeded minimum-wage pay of about $10,712 a year before taxes (A living wage just above the federal poverty line would be about $17,000).

Chaney broached another reason to pass the bill: payback for African-American support of big-ticket bond projects sought by the business community. "My people, communities of color, passed the [American Airlines] arena and the Trinity River project. But what about the working people?" he asked.

Glaringly absent from the hearing was anyone who deemed the proposal bad policy. Perhaps a panel devoted to minority concerns isn't a welcome forum for debate, but opponents and Chamber of Commerce officials have been reluctant to discuss the living-wage proposal with anyone. One exception is an April 1999 letter to the AFL-CIO's Gene Freeland, in which Mayor Kirk wrote, "studies of the effectiveness of living wage ordinances are not conclusive at this time.

"Lacking empirical evidence, it does not appear that a living wage ordinance will meet our goal of creating quality and abundant jobs," Kirk continued. "All business incentives authorized by Dallas City Hall assume that, but for the incentive, the business would locate in another city... The cost of complying with a minimum wage ordinance could easily offset the advantage of our business incentives in many cases."

In Dallas, there's at least one outspoken critic of the living-wage movement. W. Michael Cox, senior vice president and chief economist at the Federal Reserve Bank of Dallas, has blasted such initiatives as a "growing cancer...sure to cause economic death." In a June 2000 Investor's Business Daily column, Cox argued that the cost of higher wages to business would hurt the least-skilled workers. "If government dictum replaces market reality, jobs will be lost, or never created in the first place," said the fierce free-market champion.

Others say tax credits would better help the poor, rather than wage hikes that push low-end workers off benefit programs and hurt businesses most likely to hire the unskilled. Still, debate among economists is now beside the point, at least in Dallas. (As many as 75 campaigns nationwide continue). Some bitterness remains, as well as the conspiratorial suspicion that some officials knew all along that the ordinance was a legal nonstarter. Chaney complains of being bested by an "invisible government" and compares himself to "a little mosquito fighting big elephants."